For many people, buying an apartment is one of the most important steps in life

Quick Overview: Buying an Apartment Step by Step

When buying an apartment, it’s not enough to just check the price and the physical condition. From a legal standpoint, we recommend following these steps:

• Check the owner and the apartment in the real estate registry, paying particular attention to ownership rights, liens, easements, restrictions on disposal, or seals.
• Identify any debts related to the apartment and building management, and request the necessary documentation from the seller.
• Carefully draft the purchase agreement, particularly the purchase price, method of payment, conditions of transfer, and the procedure for registration in the land registry.
• Do not send the purchase price to the seller without appropriate security. It is safer to use an escrow account with precisely defined conditions for payment.
• After signing the contract, the property is registered in the land registry and the apartment is handed over. The buyer’s right of ownership to the apartment arises only upon registration in the land registry.

Are you buying an apartment and want to be sure that the purchase agreement, escrow, and transfer of ownership are properly coordinated? Let usprovide legal oversightof the entire apartment purchase process.

From our legal practice: A developer wanted to pay the purchase price for an apartment even before obtaining a building permit

One of our clients wanted to buy an apartment. He was in a great hurry to sign the purchase agreement. He just wanted to check that it didn’t contain any errors, but otherwise he was burning with impatience to sign it. Although the apartment hadn’t been built yet, it was supposed to be beautiful, with a dreamy view, and located in a “trendy” Prague neighborhood.

However, we pointed out to him that, according to the contract, the price was to be paid right at the beginning without any tangible guarantee that the apartment would even be built (sincea building permit had not yet been issued for the entire project). At first, the client saw this as an inconvenience—that we were throwing a wrench in the works and somewhat dampening his enthusiasm. But then he realized that the risk we’d pointed out was actually quite high.

This story has a happy ending. The developer agreed to most of our client’s demands and backed down. After all, the price was very high, so it was worth it for the developer to fight for the client at least a little. They therefore signed the apartment purchase agreement, and today the apartment is nearly complete and has been transferred to our client’s ownership.

We’ll oversee your apartment purchase for you. From the comfort of your own home, you can ensure that the contractual process is in order and your finances are secure.

If you’re about to sign a document labeled “apartment purchase agreement,” be sure to check that it doesn’t contain any vague or misleading language. Many people don’t realize that even seemingly trivial details—such as an inaccurate description of the unit or incorrect specifications of appurtenances (basement, share of the land)—can cause significant complications later on. That is precisely why we recommend always having a lawyer review the purchase agreement for a residential unit. Not only will the lawyer ensure that everything is stated correctly, but they will also point out potential risks that a layperson would typically overlook.

A Step-by-Step Guide to Buying an Apartment

Signing the purchase agreement itself is actually one of the later stages. A safe process for buying an apartment begins even before you make a final commitment to purchase the property.

1. Verify the Apartment and the Seller

First, verify that the seller is indeed the owner of the apartment and that the property is not encumbered by liens, easements, restrictions on transfer, or other legal defects. Also pay attention to any seals indicating that a change in the land registry entry is in progress.

For the apartment unit, also request confirmation of any outstanding debts owed to the person responsible for managing the building. Under certain legal conditions, some debts related to building management and utilities may be transferred to the new owner along with the unit.

2. Keep an Eye on the Reservation and Financing

If you’re signing a reservation agreement before your mortgage is approved, be sure to verify the terms for refunding the reservation fee in case you don’t secure financing. At this stage, also clarify when the purchase agreement is to be signed and how the purchase price will be paid.

3. Prepare the purchase agreement

The purchase agreement must precisely identify the contracting parties and the property being transferred, and specify the price, method of payment, filing of the title transfer application, handover of the apartment, and procedures in the event that either party fails to fulfill its obligations.

4. Pay the purchase price securely

The purchase price is generally not sent directly to the seller before the transfer is completed. A properly structured escrow account allows you to specify the conditions under which the funds will be released to the seller.

5. File an application for registration in the land registry

A signed purchase agreement alone does not mean that the buyer is the owner of the apartment. Ownership of the apartment is established only upon registration in the land registry.

6. Formally take possession of the apartment

It’s a good idea to draw up a handover report during the transfer. Be sure to document the condition of the apartment, the number of keys handed over, meter readings, any fixtures and fittings remaining in the apartment, and any defects discovered.

What to Watch Out for When Buying an Apartment

If you’re wondering what to look out for when buying an apartment, don’t focus solely on the purchase agreement itself. Before signing, be sure to verify the following:

• whether the information about the apartment and the owner matches the property registry,
• whether there are any liens, easements, or other encumbrances on the property,
• whether there are any identifiable debts owed to the building management associated with the unit,
• whether the contract clearly specifies the basement, parking space, or other appurtenances and shares,
• under what conditions the purchase price will be released,
• who will file the application for registration and when, and when the apartment will be handed over.

What Must a Purchase Contract Include?

When purchasing an apartment, you need a written contract. It must contain at least the following information, which we have summarized for you in five simple points:

1. Contracting Parties – A clear identification of the seller and buyer is absolutely essential. The seller must, of course, be the owner of the property as recorded in the real estate cadastre. Ideally, the seller should be identified not only by name and address but also by birth number.

2. Property – Most mistakes are made when specifying the property. It must be precisely described as defined in the real estate registry. Otherwise, there is a risk that the Land Registry will reject the entire purchase and refuse to transfer the property to the new owner. For example, it is sufficient for the contract to omit the ownership share in the building or the land.

3. Purchase Price – Determining the purchase price isn’t the only thing that needs to be clearly established. You should also specify exactly how the money will be transferred—and when. Escrow is typically used; in fact, we always recommend it to our clients. It is not advisable to pay the purchase price in advance (we also wrote about this in the story at the beginning of this article). Agree on the terms and any contractual penalties in case something is not completed on time.

4. Property Takeover – The contract also specifies who will file the application for registration in the land registry and by what date, who will pay the fee, exactly when the apartment will be handed over, and when the original owner will move out… Here, too, it’s advisable to agree on penalties for failure to meet the agreed-upon deadlines.

5. Signatures – Be sure to have the signatures notarized; you can do this at the post office or at a Czech Point office.

Download the free e-book “5 Tips for Buying or Selling Real Estate Risk-Free” and navigate the process of selling or buying a house, apartment, or plot of land smoothly.

Not sure if the contract truly protects your money and includes everything needed for the transfer of the apartment? Have a lawyer review the purchase contract before signing it.

Summary

Buying an apartment requires not only a properly drafted purchase agreement but also a thorough review of the property’s legal status and a secure arrangement for the entire transfer. Before signing, verify the apartment’s owner, land registry entries, any restrictions, and any identifiable debts related to building management. The purchase agreement must precisely specify the property being transferred, the price, the method of payment, the conditions for filing the application for registration, and the handover of the apartment. It is advisable to protect the purchase price through a properly arranged escrow account. Simply signing the contract does not make the buyer the owner—ownership of the apartment is established only upon registration in the land registry. Complete the entire process with the handover of the apartment and the handover report.